April 2012

Many articles online about workers’ compensation in North Carolina and elsewhere focus on the technical aspects of how to get benefits quickly, maximize the utility of the benefits you collect, “fight the system,” compel employers and insurers to “play fair” and so forth. These are all important topics to address – indeed, this blog has spent a tremendous amount of time analyzing these issues.

However, many hurt and sick workers are concerned not just with getting benefits – and “closing the loops” associated with their benefits quickly and efficiently – but also with managing the core instability and frustration of the workers’ comp journey. It’s important to address these issues, too. And the distinction is important. Obviously, hurt and sick workers – and their families – need the appropriate strategies and tactics and resource partners to achieve sufficient results. But focusing on your grand plans – all the big picture thinking – can lead to a kind of overwhelm and dismay.

If you just read a little bit online, for instance, you can immediately recognize:

• 50 problems that you have that are associated with your North Carolina workers’ compensation situation;
• 20 tactics that you should be implementing yesterday to get control of your life;
• 30 possible resource partners;
• 100 North Carolina workers’ compensation law firms;
• And that’s just the beginning!

Getting human beings to change and move away from the status quo is almost never a comfortable activity, even under the most generous and simplest of circumstances. In other words, if you are young and healthy and you are looking to change your diet or improve your fitness routine or get a little bit more productive… you still nevertheless will face challenges breaking out of old habitual thoughts and actions.

When you’re sick and injured – when you have a family to care for, bills to pay, hidden anger about your employer, your insurance company and possibly yourself, a painful rehab and a scary medical prognosis in front of you, et cetera – the thought of taking on even MORE risk can be almost too overwhelming to bear. Even if the risk is worth it, by any practical calculation. And so many would-be beneficiaries don’t bother taking any action about their cases. So the research that they do comes to naught. So they feel WORSE about their poor results than they would have had they done no research at all!

Not a Good Situation, By Any Means

So how can you begin to move it in some right direction — to get the wheel moving? Unfortunately, there is no cookie cutter answer here. But, if you can at the very least internalize the concepts that we’re discussing here – that taking no action is often worse than taking an inefficient or even negative action (i.e. one that moves you the wrong direction). Action creates its own clarity because of the law of inertia. Once you’re moving in any direction, you’ll find it easier to pivot and change course based on the feedback that you get.

If only we could come together as a state and find out ways for all parties involved – insurance companies, lawyers, employers, workers, hospitals, and bureaucrats alike – to work towards mutual solutions. Think about it. It would be awesome. We could probably make massive improvements not only in terms of cost savings but also in terms of better care and better results for everyone involved.

Well, good news. The great state of California has apparentlt taken us up on the challenge. According to a April 12 article in the Los Angeles Times, big companies and labor unions are working in tandem (yes, together!) to overhaul the $15 billion California workers’ comp system to reduce delays, improve medical care, and help break down some of the obstacles facing workers who need compensation.

California workers are hard up.

According to the Los Angeles Times, back in 2004, the average permanent partial disability recipient got $25,000. Meanwhile, UC Berkeley data show that that number has been more than cut in half – down to $12,000 per worker! Employers have been making out okay in the Golden State – workers’ comp premiums have actually gone down by 60%, per the Times. And insurance companies have done well because they have had to payout fewer claims and smaller claims at that.

But the workers themselves are apparently suffering grievously!

Meanwhile, a 2009 analysis conducted by then Governor Arnold Schwarzenegger’s administration found that CA’s system could be streamlined to the effect of $1.5 billion savings annually. That’s about 10% of the total value of the system – a significant amount of waste. California’s system is clogged up with “inefficiencies and frictions” according to stakeholders. Negotiations to overhaul the system will focus on how to strip down those obstacles to make the system “more administrative, more predictable, more affordable [while putting] more money in the hands of injured workers and [bringing] down the cost to employers.” (That quote is courtesy Sean McNally, a VP for a California carrot grower quoted in the Los Angeles Times story.)

Perhaps – and perhaps not. Comparing the California system to the North Carolina one is a lot like comparing apples-to-oranges. Yes, they are both metaphorical fruits, but there are many important distinctions.

Again, however, the lesson holds not just for California and North Carolina but for all 50 states – we need to strip away inefficiencies and obstacles and needless bureaucracy. It is a quest that concerns us all and it is a quest we should collectively root for.

If they don’t, the owners can actually be hit with a felony charge and face jail time, among other punishments. Why does the state care so much about this issue? What’s the big deal?

If your employer lack proper insurance — and then you get sick or hurt on the job — how do you expect to collect benefits to pay for your lost wages, the time you spend off of work, and so on and so forth? Perhaps the business owner has personal assets to cover care. But probably not. And many workers’ comp cases in North Carolina can lead to damages in the range of hundreds of thousands of dollars.

If your employer is operating on a shoestring budget – and doesn’t have a lot of significant assets, and does not carry insurance – you may not have any recourse at all!

Then your burden becomes your family’s burden – and/or the state’s burden and/or the federal government’s burden. In other words, a simple lapse of judgment on the part of your employer can cascade to have massive impacts not just on your future and your family’s future but also on the economy in general. The rest of our civil society must pick up the tab for the incompetence.

There are a few lessons to be learned:

1. If you are an employer and you do not understand your obligations under North Carolina workers’ comp law — or if you do understand them and you still lack insurance — make it an urgent, top priority to take care of your insurance issue.

Do it not just to protect yourself from felony charges. Do it to secure the well being of the people on your teams who help you produce and also to help society at large.

2. If you are an employee, and you know that your employer has not met his insurance obligations– or other obligations with respect to your safety, financial well being, or welfare — speak up!

Don’t wait until you get hurt or sick to learn about your employer’s incompetence. It’s within your rights – and it’s commonsense – to find out whether you would be protected if something happened to you on the job. If you need more clarification, you can always connect with a resource like the North Carolina Industrial Commission or a qualified North Carolina workers’ compensation law firm.

With the Supreme Court set to weigh in on the critical healthcare mandate aspect of ObamaCare, experts here in the North Carolina workers’ compensation system are already thinking through how the court’s decision might impact the rights of workers and employers here at home.

The case before SCOTUS is monumentally complicated and highly politically charged. This is not the appropriate space to dissect the nuances of the arguments — and the predispositions of the various Justices. Some pundits believe that if Supreme Court scraps the mandate requirement, then much of “ObamaCare” would be hobbled. Others suggest that a Supreme Court smackdown might even ultimately help President Obama and fellow advocates.

We are obviously not going to get into the Supreme Court prognostication business here! But this case does hold interesting implications for North Carolina workers’ compensation. Not so much in how a ruling either way would impact healthcare. But rather… we can look at this cultural moment as an indicator of the interconnectedness of various governmental polices and initiatives.

Let’s make that a little less abstract.

The battle over ObamaCare has been a unique showdown involving the Executive, Congressional and Judicial branches of government. We tend to think about issues like health insurance or workers’ compensation in a vacuum. Indeed, experts in these fields can often get so interested in the subtleties and nuances and “10 levels deep” questions about their areas of focus that they lose the ability to explain what they are talking about in plain language to people who don’t know or don’t care what they do.

We can see some of this narrow-minded thinking with the whole healthcare debate. Practically no one who reports or analyzes healthcare stories has read the thousands and thousands of pages of documents that might be relevant to understand the implications for healthcare.

Let’s put this idea into context. What might it mean for people who are trying to simply understand what benefits they might be entitled to and why their employer or insurance company has given them a hard time?

First of all, understand that employers and insurance companies have an interest in protecting their companies and bottom lines. So, if you are encountering resistance, you shouldn’t necessarily be surprised. Second of all, when you’re traversing the gauntlet of the workers’ comp system, be aware that you will encounter many individuals who claim to be “experts” on the whole enchilada. In reality, the workers’ comp system is so complex, so byzantine, and so multifaceted that no one can “know it all.”

Although state law requires most companies to purchase workers’ comp insurance or at least certify that their businesses are flush enough to self insure, 30,000+ companies lack insurance, according to an analysis done by News & Observer.

This “underinsurance” problem creates a crisis for the entire North Carolina workers’ compensation system. Employers who break this law may get hit with a Class H felony charge, which can lead to jail time. Hurt workers, meanwhile, may wind up without recourse to pay for lost wages, time off of work, medical care, and beyond. And the underinsurance problem creates stresses on the entire system – upping the workload for the North Carolina Industrial Commission, causing insurance related headaches, and on and on.

It would be great if we could all sit down and try to figure out some solutions. To that end, here are some speculative ideas:

#1. Make it easier, less stressful, and less expensive for companies to purchase workers’ comp coverage.

Employers often claim that they simply lack the money or resources or time to shop and buy policies. If we can lower the bar for them (we can experiment with various mechanisms for doing so), then we can likely reduce some of the underinsurance problem.

#2. Improve employer education.

Most employers do not like to contemplate worst case scenarios: a worker getting sick at the shop or on the industrial floor, for instance. But employers need to understand not only the risks for themselves and for their businesses but also the risks to their employees.

#3. Employees need to investigate and speak up.

If you’re an employee, you want to be able to trust that your employer is doing the right thing and following proper procedures. And while legally, your employer is responsible, employers are human beings too, and they can make mistakes. As the old Cold War saying goes: trust, but verify. If you’re a new employee at a construction job, for instance, and your new boss tells you that he is bonded and insured and licensed and everything, why not go ahead and ask to see proof? The more informed you are about your own welfare, the more protected you will be, and the less likely you will need the services of a qualified North Carolina workers’ compensation law firm.

Whether you’re a worker who got hurt on a roofing job, a family member of someone hurt in a work-related driving accident, or simply a curious citizen, we hope that you will enjoy this two-part series reviewing and analyzing the Charlotte Observer’s editorial.

According to the News and Observer, as many as 32,000 businesses in North Carolina that should carry workers’ comp do not. Dun & Bradstreet found that there are approximately 172,000 companies based in NC that employ more than three or more people. This means these companies must purchase insurance or certify that they have money to self insure. Meanwhile, insurers only wrote about 140,500 policies for businesses in 2011.

That’s a big gap!

And that gap is important because, as the Charlotte Observer piece points out, non-compliant companies put hurt workers at risk. An employer who fails to carry workers’ comp insurance can be charged with a Class H felony. Not exactly an armed robbery count — but it’s still a felony. Nevertheless, the enforcement of this law is pretty lenient. As the Charlotte Observer’s piece pointed out, two construction company owners were recently excused of this fraud charge after an investigation revealed that they let their workers’ comp policy lapse because of financial pressure.

In other words, yes, the employers did something wrong – committed a Class H felony, perhaps. But they weren’t trying to skirt the law or cheat the law as much as they were trying to keep their business afloat. That would be all well and good, except for the fact that — in this particular case — a 59-year-old employee got crushed by a load of gravel and suffered a permanent disability. The hurt worker is now out $60,000 in lost wages, and his hospital bills total $40,000.

So that’s $100,000. Where does that money come from, if his employer lacks assets and insurance?

Questions like these are far more than theoretical: they are practical and scary, especially if you or a loved one suffered a serious injury.

Meanwhile, the North Carolina Industrial Commission appears to be kicking the can on this issue. As Observer points out: “The Commission makes no effort to figure out which employers don’t have protection. It only learns of noncompliant companies when a worker has been hurt and appeals for help.”

In other words, we’re closing the proverbial barn door after the horses have all run away.

Whether your husband dislocated his knee working a construction job in Raleigh, your son broke his back in a fork lift accident, or you got exposed to hazardous chemicals at an industrial job site, you need North Carolina workers’ compensation benefits to pay for your treatment, time off, rehab, and other costs. And, certainly, workers’ comp benefits can go a long way towards helping you and your family meet expenses and keep your budget in the black.

However, hurt workers – and their families – need to think about their benefits in the context of the larger financial picture. Yes, it would be great if your employer and/or insurance company co-operated fully with you and compensated you fairly and immediately. And yes, it will be a tragedy if you have to struggle for months or years to get treated fairly by the system. But your benefits – even in a best case scenario – only constitute one thread in the tapestry of your financial life.

Being financially prudent can mean two things: penny pinching and expanding your assets.

Penny pinching and income boosting, in and of themselves, are less useful alone than they are together. To that end, here are a few ideas to help you boost your revenue stream and cut costs to stay in the black, no matter what happens with your North Carolina workers’ compensation case.

• Go over your budget with a fine toothed comb for a month to see where you and your family are spending “too much” – the more granular your audit, the more you can see ultra specifically where you are spending (and potentially wasting) your money.

• Consider downsizing. Instead of driving down to Florida for spring break, consider creating a fun stay at home “staycation.” If your mortgage payments are getting out of control, consider moving to a smaller home or even an apartment, while your family gets its financial balance.

• Avoid racking up too much credit card debt by limiting impulse purchases. Some families even find it useful to make purchases only in cash (to avoid getting into credit card trouble), although that kind of system creates its own accounting headaches and also leaves you more vulnerable to problems like theft, etc.

If you got sick or injured at work, and you need North Carolina workmen’s compensation to pay your bills and deal with your other issues, you may be unaware of just how many different and diverse problems have stemmed from your workplace mishap. It’s not just that you have a medical problem now. You also have a financial problem. You also have a “when will I go back to work” problem. You also have a “which North Carolina workers’ compensation law firm should I choose” problem. You also have a “how am I going to deal with my anger about this accident” problem. And so on and so forth.

If you took the time to write down all these different problems – the large and small stresses in your life that flow from your injury – you could probably fill at least a page or two out of a notebook.

The question is: Even if you did write down all of these issues, what could you do, strategically, to tackle them?

One very curious method – developed by a protégé of the objectivist thinker, Ayn Rand, is called sentence stems. Here is what you do. Take any problem out of the basket of problems we talked about earlier and write it down on a piece of paper or a word document. For instance: “I need to figure out what I am going to do with my career now that I have been temporarily/permanently hurt.” Now you phrase that problem in terms of an objective. For instance: “To figure out how I’m going to deal with my post injury career transition, I will…”

Make sure you leave the end of that statement blank – something you can fill in. Now, over the course of the next 14 days or so, spend five minutes brainstorming answers to this question. Try to come up with five to ten answers every time you do this exercise – if you do ten answers a day for 14 days, you will get 140 different answers. Your goal is not to try to think through whether one answer is “right” or “wrong” – rather, it’s to go for volume to try to access the wisdom of your subconscious. If you do this enough, and you actively avoid trying to repeat yourself, by the end of the exercise, you will have a really diverse perspective on what’s going on in your thinking – both on the surface level and deep underneath. And once you’ve surfaced that thinking, you make more resourceful decisions based on the more complete portrait you have of your inner dialogue.

To get started, just pick the one issue in your life regarding North Carolina workers’ comp that’s giving you the most agitation and most stress and work on that first. You might be surprised by the profound liberation just this exercise will provide for you.